Question 1

Use the following information to answer the next  questions. Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8P
Supply: QS1U1B1sS1U1B0 = -60 + 3P
-What would be the quantity supplied if a price floor is set at $20?
A) 90
B) 45
C) 265
D) 165
E) 305

Accepted Answer

The answer of Use the following information to answer the...

Question 2

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P₁ is imposed, by how much would the quantity demanded change? A) It would increase by 12,000 units. B) It would decrease by 30,500 units. C) It would decrease by 12,000 units. D) It would increase by 30,500 units. E) It would increase by 30,000 units.

Accepted Answer

A binding price ceiling set below the market equilibrium price causes the quantity demanded to increase because the lower price makes the good more affordable to consumers.

Question 3

If a price ceiling is imposed at $15 per unit when the equilibrium market price is $12, there will be
A) no surplus or shortage.
B) a surplus.
C) a shortage.
D) a downward pressure on prices.
E) an upward pressure on prices.

Accepted Answer

Since the price ceiling is set above the equilibrium price, it does not affect the market, and there will be no surplus or shortage as the market can operate at its equilibrium.

Question 4

Which of the following is an accurate statement about the consequence of nonbinding price ceilings?
A) They prevent the seller from receiving the equilibrium price.
B) They require the seller to advertise the product at the equilibrium price.
C) They create a surplus in the legal market.
D) They do not change the quantity of goods bought or sold in the legal market.
E) They increase the quantity demanded of the good in question.

Accepted Answer

Nonbinding price ceilings do not change the quantity of goods bought or sold in the legal market because they do not affect the market equilibrium. If the price ceiling is set above the equilibrium price, it has no effect on the market, as the equilibrium price already exists. Therefore, the quantity of goods bought or sold in the legal market remains the same as it would be without the price ceiling.

Question 5

Use the following information to answer the next  questions. Market for flat-screen TVs:
Demand: QS1U1B1dS1U1B0 = 2,600 - 5P
Supply: QS1U1B1sS1U1B0 = -1,000 + 10P
-What would be the equilibrium quantity for flat-screen TVs?
A) 240
B) 140
C) 24
D) 1,400
E) 1,600

Accepted Answer

The equilibrium quantity can be found by setting demand equal to supply and solving for quantity: 2,600 - 5P = -1,000 + 10P 3,600 = 15P P = 240 Substituting P back into either the demand or supply equation gives us the equilibrium quantity: Q_d = 2,600 - 5(240) = 1,400 Therefore, the equilibrium quantity for flat-screen TVs is 1,400.

Question 6

Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?
A) Legal market prices will rise in the community with a binding price ceiling.
B) Legal market prices will fall in the community with a binding price ceiling.
C) The price and the quantity sold in the community without a nonbinding price ceiling will be the same as the price and quantity in the community with a nonbinding price ceiling.
D) There will be more shortages in the community with a binding price ceiling.
E) The black market in the community with a binding price ceiling will not be strong because consumers will simply purchase the product in the community that has no price ceiling.

Accepted Answer

A nonbinding price ceiling is set above the equilibrium price, meaning it does not affect the market. Therefore, prices and quantities in both communities would be similar as the nonbinding price ceiling has no real effect on the market dynamics.

Question 7

Use the following information to answer the next questions. Market for used cars:
Demand: QS1U1B1dS1U1B0 = 154,000 - 86P
Supply: QS1U1B1sS1U1B0 = -100 + 14P
-What would be the equilibrium quantity for used cars?
A) 100
B) 154,100
C) 21,474
D) 1,541
E) 153,900

Accepted Answer

To find the equilibrium quantity, set the demand equal to the supply: 154,000 - 86P = -100 + 14P. Solving for P gives the equilibrium price, and substituting back into either the demand or supply equation gives the equilibrium quantity, which is 21,474.

Question 8

Why does a shortage that occurs under a binding price ceiling increase over time?
A) Demand becomes more elastic.
B) Demand becomes more inelastic.
C) Demand and supply both become more elastic.
D) Demand and supply both become more inelastic.
E) Demand becomes more elastic, but supply becomes more inelastic.

Accepted Answer

The answer of Why does a shortage that occurs under...

Question 9

What will happen in a market where a nonbinding price ceiling is removed?
A) There will be downward pressure on the price in the legal market.
B) The products sold will improve in quality and become more plentiful.
C) Sellers will face a reduced incentive to sell the products.
D) The price and quantity will not change in the legal market.
E) There will be increased pressure to buy and sell the goods on the black market.

Accepted Answer

A nonbinding price ceiling is set above the equilibrium price, so removing it does not affect the market price or quantity.

Question 10

Use the following information to answer the next  questions. Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8P
Supply: QS1U1B1sS1U1B0 = -60 + 3P
-What would be the equilibrium quantity for hardcover books?
A) 100
B) 45
C) 385
D) 35
E) 11

Accepted Answer

The answer of Use the following information to answer the...

Question 11

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P₁ is imposed, by how much would the quantity supplied change? A) It would increase by 32,000 units. B) It would decrease by 18,000 units. C) It would decrease by 30,500 units. D) It would decrease by 30,000 units. E) It would decrease by 32,000 units.

Accepted Answer

The answer of Refer to the accompanying figure to answer...

Question 12

Use the following information to answer the next questions. Market for used cars:
Demand: QS1U1B1dS1U1B0 = 154,000 - 86P
Supply: QS1U1B1sS1U1B0 = -100 + 14P
-What would be the quantity demanded if a price ceiling is set at $1,000?
A) 500
B) 54,100
C) 68,000
D) 13,900
E) 21,474

Accepted Answer

To find the quantity demanded at a price ceiling of $1,000, substitute $1,000 for P in the demand equation: 154,000 - 86(1,000) = 154,000 - 86,000 = 68,000.

Question 13

Refer to the accompanying figure to answer the next questions.
 
-If there is a $180 price ceiling imposed on a textbook, what will be the disequilibrium amount?
A) There will be a shortage of 1,500,000 units.
B) There will be a shortage of 800,000 units.
C) There will not be a shortage.
D) There will be a shortage of 3,000,000 units.
E) There will be a shortage of 450,000 units.

Accepted Answer

The answer of Refer to the accompanying figure to answer...

Question 14

Setting a price ceiling below the equilibrium price can result in
A) a surplus, where the quantity demanded exceeds the quantity supplied.
B) a shortage, where the quantity demanded exceeds the quantity supplied.
C) a surplus, where the quantity supplied exceeds the quantity demanded.
D) a shortage, where the quantity supplied exceeds the quantity demanded.
E) no impact on the quantity demanded or on the quantity supplied.

Accepted Answer

Setting a price ceiling below the equilibrium price creates a situation where the quantity demanded exceeds the quantity supplied. This is known as a shortage. The price ceiling prevents suppliers from raising their prices to reflect the true market value, which in turn leads to excess demand. As a result, some people will not be able to purchase the good or service they desire.

Question 15

What is the amount of the shortage or surplus in the market for public transportation when the price ceiling is $1.75? $$\begin{array}{l}
\text { Market for Public Transportation }\
\begin{array} { l c c } 
\hline \text { Price } & \text { Quantity Demanded } & \text { Quantity Supplied } \
\hline \$ 0.75 & 100,000 & 65,000 \
\$ 1.00 & 92,000 & 80,000 \
\$ 1.25 & 86,000 & 86,000 \
\$ 1.50 & 80,000 & 100,000 \
\$ 1.75 & 75,000 & 115,000 \
\$ 2.00 & 68,000 & 116,000 \
\hline
\end{array}
\end{array}$$
A) 100,000
B) 86,000
C) 75,000
D) 40,000
E) 0 zero)

Accepted Answer

The answer of What is the amount of the shortage...

Question 16

Refer to the accompanying figure to answer the next questions.
 
-If there is a $60 price ceiling imposed on a textbook, what will be the disequilibrium amount?
A) There will be a shortage of 800,000 textbooks.
B) There will be a surplus of 800,000 textbooks.
C) There will be neither a shortage nor a surplus.
D) There will be a shortage of 2,600,000 textbooks.
E) There will be a shortage of 400,000 textbooks.

Accepted Answer

A price ceiling set below the equilibrium price typically results in a shortage because the price is too low to clear the market, leading to higher demand than supply.

Question 17

Refer to the accompanying figure to answer the next  questions.
 
-At the price of the binding price floor, by how much would the quantity supplied change from the market equilibrium?
A) The quantity supplied would increase by 32,000 units.
B) The quantity supplied would decrease by 18,000 units.
C) The quantity supplied would increase by 30,500 units.
D) The quantity supplied would decrease by 30,500 units.
E) The quantity supplied would decrease by 32,000 units.

Accepted Answer

A binding price floor set above the market equilibrium price causes the quantity supplied to increase because suppliers are willing to supply more of the good at the higher price, leading to a surplus.

Question 18

Use the following information to answer the next  questions. Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8P
Supply: QS1U1B1sS1U1B0 = -60 + 3P
-What would be the quantity demanded if a price ceiling is set at $20?
A) 90
B) 45
C) 265
D) 165
E) 305

Accepted Answer

The answer of Use the following information to answer the...

Question 19

Use the following information to answer the next  questions. Market for flat-screen TVs:
Demand: QS1U1B1dS1U1B0 = 2,600 - 5P
Supply: QS1U1B1sS1U1B0 = -1,000 + 10P
-What would be the quantity supplied if a price ceiling is set at $400?
A) 600
B) 240
C) 0
D) 3,000
E) 2,400

Accepted Answer

The answer of Use the following information to answer the...

Question 20

Use the following information to answer the next  questions. Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8P
Supply: QS1U1B1sS1U1B0 = -60 + 3P
-What would be the equilibrium price for hardcover books?
A) $100
B) $45
C) $385
D) $35
E) $11

Accepted Answer

To find the equilibrium price, we set demand equal to supply: 
325 - 8P = -60 + 3P 
Solving for P, we get P = $35.

Quiz 5: Price Controls

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the quantity supplied if a price floor is set at $20?

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P₁ is imposed, by how much would the quantity demanded change?

If a price ceiling is imposed at $15 per unit when the equilibrium market price is $12, there will be

Which of the following is an accurate statement about the consequence of nonbinding price ceilings?

Use the following information to answer the next questions. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5P Supply: Q_s = -1,000 + 10P -What would be the equilibrium quantity for flat-screen TVs?

Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?

Use the following information to answer the next questions. Market for used cars: Demand: Q_d = 154,000 - 86P Supply: Q_s = -100 + 14P -What would be the equilibrium quantity for used cars?

Why does a shortage that occurs under a binding price ceiling increase over time?

What will happen in a market where a nonbinding price ceiling is removed?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the equilibrium quantity for hardcover books?

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P₁ is imposed, by how much would the quantity supplied change?

Use the following information to answer the next questions. Market for used cars: Demand: Q_d = 154,000 - 86P Supply: Q_s = -100 + 14P -What would be the quantity demanded if a price ceiling is set at $1,000?

Refer to the accompanying figure to answer the next questions. -If there is a $180 price ceiling imposed on a textbook, what will be the disequilibrium amount?

Setting a price ceiling below the equilibrium price can result in

Refer to the accompanying figure to answer the next questions. -If there is a $60 price ceiling imposed on a textbook, what will be the disequilibrium amount?

Refer to the accompanying figure to answer the next questions. -At the price of the binding price floor, by how much would the quantity supplied change from the market equilibrium?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the quantity demanded if a price ceiling is set at $20?

Use the following information to answer the next questions. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5P Supply: Q_s = -1,000 + 10P -What would be the quantity supplied if a price ceiling is set at $400?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the equilibrium price for hardcover books?

Quiz 5: Price Controls

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Qd = 325 - 8P Supply: Qs = -60 + 3P -What would be the quantity supplied if a price floor is set at $20?

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P1 is imposed, by how much would the quantity demanded change?

If a price ceiling is imposed at $15 per unit when the equilibrium market price is $12, there will be

Which of the following is an accurate statement about the consequence of nonbinding price ceilings?

Use the following information to answer the next questions. Market for flat-screen TVs: Demand: Qd = 2,600 - 5P Supply: Qs = -1,000 + 10P -What would be the equilibrium quantity for flat-screen TVs?

Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?

Use the following information to answer the next questions. Market for used cars: Demand: Qd = 154,000 - 86P Supply: Qs = -100 + 14P -What would be the equilibrium quantity for used cars?

Why does a shortage that occurs under a binding price ceiling increase over time?

What will happen in a market where a nonbinding price ceiling is removed?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Qd = 325 - 8P Supply: Qs = -60 + 3P -What would be the equilibrium quantity for hardcover books?

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P1 is imposed, by how much would the quantity supplied change?

Use the following information to answer the next questions. Market for used cars: Demand: Qd = 154,000 - 86P Supply: Qs = -100 + 14P -What would be the quantity demanded if a price ceiling is set at $1,000?

Refer to the accompanying figure to answer the next questions. -If there is a $180 price ceiling imposed on a textbook, what will be the disequilibrium amount?

Setting a price ceiling below the equilibrium price can result in

Refer to the accompanying figure to answer the next questions. -If there is a $60 price ceiling imposed on a textbook, what will be the disequilibrium amount?

Refer to the accompanying figure to answer the next questions. -At the price of the binding price floor, by how much would the quantity supplied change from the market equilibrium?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Qd = 325 - 8P Supply: Qs = -60 + 3P -What would be the quantity demanded if a price ceiling is set at $20?

Use the following information to answer the next questions. Market for flat-screen TVs: Demand: Qd = 2,600 - 5P Supply: Qs = -1,000 + 10P -What would be the quantity supplied if a price ceiling is set at $400?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Qd = 325 - 8P Supply: Qs = -60 + 3P -What would be the equilibrium price for hardcover books?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the quantity supplied if a price floor is set at $20?

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P₁ is imposed, by how much would the quantity demanded change?

Use the following information to answer the next questions. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5P Supply: Q_s = -1,000 + 10P -What would be the equilibrium quantity for flat-screen TVs?

Use the following information to answer the next questions. Market for used cars: Demand: Q_d = 154,000 - 86P Supply: Q_s = -100 + 14P -What would be the equilibrium quantity for used cars?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the equilibrium quantity for hardcover books?

Refer to the accompanying figure to answer the next questions. -The market is currently at market equilibrium. If a binding price ceiling of P₁ is imposed, by how much would the quantity supplied change?

Use the following information to answer the next questions. Market for used cars: Demand: Q_d = 154,000 - 86P Supply: Q_s = -100 + 14P -What would be the quantity demanded if a price ceiling is set at $1,000?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the quantity demanded if a price ceiling is set at $20?

Use the following information to answer the next questions. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5P Supply: Q_s = -1,000 + 10P -What would be the quantity supplied if a price ceiling is set at $400?

Use the following information to answer the next questions. Market for a new hardcover book: Demand: Q_d = 325 - 8P Supply: Q_s = -60 + 3P -What would be the equilibrium price for hardcover books?